Turn several payments into a planned strategy

Debt Consolidation Using Home Equity

Qualifying homeowners may be able to use available equity to pay higher-cost obligations, but a lower monthly payment does not automatically mean a lower total cost—and unsecured debt becomes debt secured by the home.

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Start with the complete debt picture

List balances, rates, minimum payments and payoff timelines. Then compare them with the new mortgage payment, closing costs, loan term and total interest—not just the immediate monthly-payment change.

Understand the collateral risk

Credit cards and many consumer loans are unsecured. Moving those balances into mortgage debt places the home behind repayment, so missed payments can put the property at risk.

Avoid solving only the symptom

Consolidation can improve monthly cash flow, but it does not prevent balances from rebuilding. A sustainable budget and a plan for paid-off accounts are part of the decision.

Do not assume a tax deduction

Tax treatment depends on how proceeds are used and current law. Ask a qualified tax professional rather than assuming home-equity interest will be deductible.

Need an answer for your situation?

General information is useful. A mortgage professional can help you evaluate the facts that apply to you.

Contact 7th Level Mortgage